Altering an worker’s compensation construction from a set wage to an hourly wage is a legally permissible observe underneath sure circumstances. This usually entails reclassifying the worker from exempt to non-exempt standing underneath wage and hour legal guidelines, that means they grow to be eligible for extra time pay. For instance, a salaried advertising supervisor may be transitioned to an hourly charge for a project-based position with clearly outlined hours.
This shift can provide benefits for each employers and workers. For companies, it permits for better flexibility in managing labor prices, significantly during times of fluctuating workload. Workers, then again, could profit from incomes extra time compensation for hours labored past the usual workweek. Traditionally, the authorized framework surrounding wage and hour rules has developed to make sure honest labor practices and defend workers from exploitation. Understanding these rules is significant for each employers and workers.